The Australian Government has announced a major change to how vehicle emissions are counted under the New Vehicle Efficiency Standard (NVES). Instead of tracking emissions when a vehicle is imported, they will be measured at the point of sale
The NVES came into effect on January 1, 2025. However, under current rules, carmakers won’t be penalised for exceeding CO2 targets until July 1, 2025.
In a media statement, Minister for Small Business Julie Collins MP said: “Bringing this work forward now, ahead of a fulsome review in 2026, signals the Government’s determination to ensure Australian automotive businesses are not adversely impacted by the business practices of international car companies.”
Positive Response from Industry
The Motor Trades Association of Australia (MTAA) has also strongly backed the Government’s decision to change the NVES compliance point to the time of sale.
“…The Government’s announcement that it will bring forward the review of the New Vehicle Efficiency Standard (NVES) compliance point—shifting it from the point of import to when a vehicle is sold to a customer—is strongly supported by MTAA,” said Matt Hobbs, CEO of MTAA.
“This change would ensure that car companies cannot push stock onto dealers to meet NVES compliance, thus placing the dealer in a position where they must shoulder financing costs until the vehicles are sold.”
“Emissions should be counted when the vehicle is sold. By looking to count the impact of CO2 at the point of sale, the Government will remove the temptation for car companies to push vehicles onto dealers, no matter the demand of consumers, just to hit a compliance number for a particular year.”
“These critical changes will assist Australian businesses to remain competitive and ensure they are not disadvantaged by unfair business practices, while encouraging greater investment and a more sustainable automotive future.”
Government Pledges Support for Small Businesses
Minister Collins also reinforced the Government’s commitment to strengthening the franchising sector, which plays a key role in the economy.
“The franchising sector is an important sector, employing around 520,000 people and contributing more than $135 billion to the economy each year.”
“The Albanese Labor Government is committed to building the long-term resilience of the franchising sector by introducing considered reforms that address identified harms.”
She also highlighted the role of the Australian Competition and Consumer Commission (ACCC) in enforcing fair trading practices.
“More active enforcement and compliance work by the ACCC will help target bad behaviours without increasing the regulatory burden for those in the sector already doing the right thing.”
“These measures support one of the Government’s key small business priorities to level the playing field for small businesses by enabling healthy competition and ensuring small businesses get a fair go.”
A Fairer Future for the Automotive Industry
With the automotive industry undergoing rapid changes, these reforms aim to create a fairer, more transparent market for dealers. The Government hopes to support investment, secure jobs, and encourage sustainable business practices. They are seeking to do this by shifting NVES compliance to the point of sale. It also aims to strengthen franchise protections to further support these goals.
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